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iPhone

 

Apple iPhone is one of the most expensive smartphones and now it is going to even pricier. Thanks to Trump administration who is threating to impose more tarrif on Chinese products, iPhone prices could go up to 14%, according to CNBC. This would make the cheapest iPhone XR $750 to cost us an extra $100. Whereas the most expensive one the iPhone XS max would cost $200 more - bringing its price tag up to $1,650. J.P Morgan said, "We estimate a price increase of around 14% is required to absorb the impact of a 25% tariff, keeping margin dollars for all players in the supply chain constant," J.P. Morgan said in a note to clients Tuesday.


With $200 billion on hand, Apple can easily afford this cost but most likely it is going to past down to the customer. The tarrif isn't a reality yet but on Monday, Trump tweeted that customers in U.S should buy stuff from other countries or something made in U.S. This is easy to say but in practical terms may be not easy to do. Apple has clearly stated that it iPhones may not get have a huge impact from this trade war but the prices of other products like Apple watches and Air Pods are going to be higher with immediate effect if the tarrif is imposed.


According to statista.com, throughout 2010, 304.7 million devices were shipped. In 2018, we see that 1.4 billion units were sold, which is way higher figure anyone would have anticipated a decade ago. It seems that market is already saturated with dozens of smartphone manufacturers already. Looking in the future, some people suggest that Apple may move its production unit to some other Asian country or should move to U.S completely. Bank of America Merrill Lynch estimates that iPhone prices would have to increase by around 20 percent if production was moved to the U.S. "We estimate the incremental cost of manufacturing iPhones in the U.S. could be 15-25%, and, if passed on to consumers could lead to demand destruction, in our view," the Bank of America said in a note.


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